In the real economy, nothing changed when the stock market andother markets tanked. Interest rates will rise this year forcertain, but for those of us old enough to recall, 4.5% or 5% ratesare still excellent. Many of us once believed 8%-9% was the normand in the eighties it was considered good after the spikes in 1981to 21%. If you cannot justify a deal at 5% or 6% rates, don't dothe deal. It has too thin a margin.
Powell is known to economists and bankers as a sound guy, who isnot a hawk and not a wild dove. He is pretty much a steady hand andwill not suddenly go pushing rates a lot higher than what we allknow will be three or at most four raises. We all know theseraises are baked in, so you should long ago have been assuming aten year at 3% -3.5% for this year, and maybe at 4% in 2019 in yourmodels. While it is possible rates could move higher faster, thatwould only be the result of GDP growing at 4%, and that is a goodnews thing.
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Joel Ross
Joel Ross began his career in Wall St as an investment banker in 1965, handling corporate advisory matters for a variety of clients. During the seventies he was CEO of North American operations for a UK based conglomerate, and sat on the parent company board. In 1981, he began his own firm handling leveraged buyouts, investment banking and real estate financing. In 1984 Ross began providing investment banking services and arranging financing for real estate transactions with his own firm, Ross Properties, Inc. In 1993 Ross and a partner, Lexington Mortgage, created the first Wall St hotel CMBS program in conjunction with Nomura. They went on to develop a similar CMBS program for another major Wall St investment bank and for five leading hotel companies. Lexington, in partnership with Mr. Ross established a hotel mortgage bank table funded by an investment bank, and making all CMBS hotel loans on their behalf. In 1999 he formed Citadel Realty Advisors as a successor to Ross Properties Corp., focusing on real estate investment banking in the US, UK and Paris. He has closed over $3.0 billion of financings for office, hotel, retail, land and multifamily projects. Ross is also a founder of Market Street Investors, a brownfield land development company, and has been involved in the acquisition of notes on defaulted loans and various REO assets in conjunction with several major investors. Ross was an adjunct professor in the graduate program at the NYU Hotel School. He is a member of Urban Land Institute and was a member of the leadership of his ULI council. In 1999, he conceived and co-authored with PricewaterhouseCoopers, the Hotel Mortgage Performance Report, a major study of hotel mortgage default rates.
